by Molly Smith 0 comments

If you are a software engineer, then the sky is the limit since most of the big online software companies are started by engineers. Witness the rise of Yahoo, Ebay, Amazon, Google- all of which are multi-billion dollar companies started by people with computer science degree or nerds. If you don't have a computer science degree or do not know how to code, do not despair as there are many ways to make money online as well.

Before that, it is important to think of the development of the web business model into 3 key categories.

Web 1.0 business model
This is essentially making money from e-commerce and banner advertising. It works. Big companies such as Yahoo, Ebay and Amazon  are built through this model. Essentially, the web 1.0 model  are considered to be low margins compared to other web business model.

Web 2.0 business model
This is about user generated content and getting users to contribute articles for free and then generating advertising through traffic coming to the site. The Web 2.0 business model is essentially piggy backing on the search economy and Google is the greatest benefactor of this business model as they are one of the largest source of advertising inventory and get a cut from publishers for it. However, they do help eliminate the need for any small businesses to hire sales force and engage with advertisers.

Web 3.0 business model
This business model is based on virtual goods and considered a high margin business. Virtual goods is like a physical good except that the manufacturing of virtual goods are essentially zero in cost after a one time design cost.

So, what does this mean for you in terms of trying to make money online?

Make money through ecommerce
If you think you have a product that is unique or you have some arbitrage advanteges in terms of getting a cost advantage in a product sold, then this online business could be for you. I have known people who make great income purchasing branded goods from factory outlets and then reselling them on Ebay or other ecommerce aggregators. In this case, they are playing on the arbitrage of access where buyers may not have access to the kind of goods in their state or city. For example, someone who is in middle America may not have a branded store nearby and therefore would rather buy online than drive hours away. If you can get some unique products that no one else have or can easily get, you can also make a decent income. The problem with ecommerce is that you need to invest money to purchase the initial inventory. However, you can start small and with little capital, buy a limited supply of stock. Then, find out if you can actually make money selling it online. When you can, then you might want to invest more money in acquiring more stocks to buy. When you are starting, it is better to go with a large ecommerce aggregator or store versus trying to set up your own website. The larger websites already have traffic and people searching for products to buy and are generally less expensive to set up and have all the necessary support. Here are some of this website to try to sell online to make money: Ebay ProStores,  Yahoo Store and Amazon.

Make money by witing online
They always say content is kind. By setting up your own blog or writing on site that have advertising revenue share, you can also generate a decent income. However, if you are not serious enough, do not expect to make lots of money. In fact, you should really be expecting to make very little for the most part until it becomes a professional endeavor or you happen to be writing content that is in high demand that no one is writing. To give you a sense of the numbers, your site will need to generate a few hundred thousand pageviews before you can make money online that is meaningful. One metric to use is your RPM (Revenue per thousand page view). For the most part, you should only expect about $3-$7 RPM unless you are some large publisher or focus niche sites that may be able to command better rates. So, if you generate 100,000 page views a month for your content, you will only earn between $300-$700 per month and it takes a lot of writing to really get to that number of page view. Having said that, it may also be one of the least costly way of doing it since there are many free online blogging tools that allows you to put advertising on your blog. The only cost there is your time.

Make money selling virtual goods
If you are a great designer or artist, selling virtual goods may be your gig to make money online.  The key is trying to find the right platform to do it and many have done it on MySpace, Facebook, Second Life, etc. You need to be designing for a platform that has tons of traffic since the virtual economy would already be quite vibrant. If you can sell virtual goods, the margin can be quite high and very profitable form a return on investment on your time.

Finally, there is really no free lunch. The beauty of making money online is that the startup cost is low compared to setting up your restaurant, buying franchises, etc. However, it does not mean it is easy to make money online. The biggest cost will be your time and if this is something you are doing on the side and making extra income, then it is great.

Here are some startup tips for you to make money:

1)  Go to a blogging tool such as Blogger.com and start writing. Write as often as you can and as much as you can. Track the number of pageviews you get a few months later. The chances are that unless you write great articles that people are linking to you, you will not make a lot of money as you will not generate enough page views to make it meaningful.

2) Go to Ebay and look around for a branded product that seem to be quite demanded based on the number of bids on a product and the supply. You want to find products that are in high demand but at low supply. Then, get that from a factory outlet at low cost. Put it up online and see if you can sell it and make a profit.